Equivalence of organic food standards in the
European Union and the United States of
America
by Milica Kosovska
ANR: 901967
2013
Tilburg, The Netherlands
© Copyright by Milica Kosovska
ALL RIGHTS RESERVED
(2013)
ABSTRACT
This study outlines the current situation of organic standards applied in the European Union (EU)
and United States (US). The US as well as EU have their own regulatory schemes applied to
labeling, certification and trade of organic food. The purpose of this study is to investigate the
differences between their organic standards and gain more insight into their similarities.
Historic signing finalizes the organic equivalence arrangement between EU and US. This
important bilateral agreement concluded in February 2012 will expand market access for organic
producers by reducing double requirements of certification and avoiding long-lasting
bureaucratic procedures. The agreement effective from June 1 will result in the free movement of
certified organic products, provided that the European Union and United states meet the terms of
the equivalency arrangement.
This study has two major purposes. Firstly, the organic standards of the United States and
European Union will be discussed more in detail. This part of the study will investigate the
organic labeling and certification standards in both the United States and European Union.
Secondly, the primary purpose of this paper is to compare those standards and focus on their
equivalency issues.
Finally, the study insists on the necessity of understanding importance of the emerging
issues from organic equivalency in relation to organic trade between the US and EU. Thus, the
main research question, namely, till what extent are the organic standards between EU and US
equivalent will be answered and analyzed in this paper.
ii
Table of Contents
ABSTRACT .................................................................................................................................... ii
INTRODUCTION ............................................................................................................................ 1
CHAPTER 1: Certification and Labeling of Organic Foods with Relation to Public Perceptions .. 3
CHAPTER 2: EU Organic Legislation and Labeling ...................................................................... 7
CHAPTER 3: US Organic Legislation and Labeling ..................................................................... 12
CHAPTER 4: Certification of Organic Food According to American Standards ......................... 16
CHAPTER 5: Certification of the Organic Food According to European Union Standards ......... 19
CHAPTER 6: International Standards in Relation to the WTO and Public Versus Private Organic
Standardization ............................................................................................................................... 24
6.1 The TBT and SPS agreements within the framework of WTO ......................................................... 24
6.2 IFOAM and Codex Alimentarius Commission ................................................................................. 26
6.3 Public versus Private organic food standardization ........................................................................... 29
CHAPTER 7: Equivalency for Organic Trade ............................................................................... 33
7.1 Organic equivalence arrangement between EU and U.S ................................................................... 35
CHAPTER 8: Analysis of Bilateral Equivalence Arrangement on Trade of Organic Products
between the EU and US - A Comparison of Organic Standards .................................................... 38
8.1 Comparison of certification and inspection systems in the EU and US ............................................ 40
8.2 Comparison of production standards with focus on livestock issue .................................................. 43
CONCLUSION .............................................................................................................................. 47
ANNEX .......................................................................................................................................... 50
BIBLIOGRAPHY .......................................................................................................................... 56
Articles ........................................................................................................................................... 56
EC Legislation/ US Legislation...................................................................................................... 60
iii
INTRODUCTION
Organic is a term interpreted by consumers in a variety of ways and contexts. Some of the
individuals are not even aware that the word ‘organic’ is strictly regulated. The main subject of
my thesis is to examine the organic food regime from the legal point of view. In order to gain
proper insight into the organic regulatory framework, two main actors with the most sophisticated
legislation have been chosen.
The European Union (EU) and United States of America (USA) are two of the largest
producers of organic food in the world. Organic trade has grown on importance in light of
recently signed historical agreement between EU and US. The agreement represents a final
outcome of long-lasting endeavor and compromise relating to the equivalence of organic food
standards. I consider this new partnership between the EU and US as a first step to significant
improvement of organic standard transparency on a global scale. Despite its long negotiation
process, the year 2012 brought a change to the transatlantic organic trade. Therefore, the main
question addressed in this paper is, whether the organic standards in the US and EU are
equivalent and to what extent.
In order to assess the issue of equivalency, both European and US organic legal systems
shall be examined and subsequently compared. To make clear, for the purpose of this paper I will
refer to European standards, however it will be meant only for the 27 Member States that are in
the EU. Comparative law is the most effective method used to compare different legal systems.
Given that I am going to research equivalence of organic products in the different areas, this
method represents the most suitable option for my thesis.
This paper has been divided into eight chapters that are dealing with both substantial and
procedural aspects of organic food regime in the European Union and United States. Chapter 1
begins by laying out the theoretical dimensions of the organic certification and labeling with
relation to the consumers perceptions. The subsequent two chapters seek to address EU and US
organic legislation and labeling. Furthermore, chapters 4 and 5 look at the certification of the
organic food from the theoretical as well as procedural point of view. On the detailed basis of the
EU and US certification systems currently available, it is possible to compare them in later stage
of the thesis.
The question of whether there are also international organic standards applicable and what
is their relation with the World Trade Organization has caused much debate over the years. In
1
chapter 6, the discussion will point to the legal value of international organic standards and the
WTO agreements concerning food safety. Moreover, much of the current debate revolves around
public versus private organic food standardization. Thus, a closer look at the role of the public
and private bodies will reveal the current complexity of the topic.
The next chapter first considers equivalency for organic trade in general and then looks at
the equivalency arrangement between the EU and US. The second part of the chapter deals with
the significance of the recent equivalency partnership with the connection to the future organic
trade.
Using the information provided in the earlier sections, it will then be possible to analyze
the differences between EU and US organic standards, and identify the gaps in the equivalency
arrangement. Thus, the last chapter is divided into three sections: firstly, historical overview of
the organic agriculture and differences between EU and US attitude toward organic production is
considered; secondly certification and inspection systems in the EU and US are compared and
analyzed; finally comparison of production standards with focus on livestock is done.
This study is an attempt to firstly compare organic standards and secondly address the
issue of equivalence. I strongly believe that, even though the standards between the EU and US
are approved as equivalent there is still room for improvement. On the basis of the equivalency
gaps detected in this thesis, it seems to me evident that the organic legislation on the both
continents should be amended and harmonized to reach the equal organic status.
2
CHAPTER 1: Certification and Labeling of Organic Foods with Relation to
Public Perceptions
Organic food is a growing industry that needed to be codified. Certification schemes for
organic food were invented in order to eliminate uncertainty and protect consumers from
misleading standards. The corresponding labeling provides a competitive advantage for producers
to show the consumers that the products have claimed quality features. The relevance of organic
food regime and consumers view and preferences for organic products will be examined in this
chapter.
Certification has always been an important signal of the quality of products or services.
Certification systems provide a new perspective of improvement in the worldwide market. The
main role of labeling is to have a common understanding of the product and identify its features
and qualities. Labels claim to provide information about characteristics of these products, which
consumers cannot directly observe but which many of them consider desirable. Labeling,
however, differs according to the specific field and its standards.
The proliferation of certification and labeling initiatives has led to an inevitable need of
harmonization of organic farming standards. According to the Cercost research project supported
by the European Commission there was a lack of transparency and effectiveness in the organic
food certification system. “In consequence, different actors and stakeholders are involved in
shaping and managing the certification schemes, different approaches and tools have evolved,
and different emphases put. Thus, alternative certification systems provide a new perspective on
the organic certification scheme, potentially giving new ideas for how to improve the current
organic certification system.”1
Explanation of terminology step-by-step is the key of the ‘organic food labeling’
understanding. Organic agriculture is a rapidly growing industry that is expanding on day-to day
basis. “The term ‘organic agriculture’ refers to a process that uses methods respectful of the
environment from the production stages through handling and processing. Organic production is
not merely concerned with a product, but also with the whole system used to produce and deliver
the product to the ultimate consumer.”2
1
H. Moschitz, F. Meinshausen et al. (2001) The Potential of the Alternative certification systems D21 Part
A.,CERCOST Project, page 1
2
Nadia El-Hage Scialabba and Caroline Hattam (2002) Organic agriculture, environment and food security.
3
Pursuant to The Organic Trade Association it is important to promote and protect organic
trade to benefit the environment, farmers, the public, and the economy. Organic agriculture, a
worldwide growth industry, can be a profitable, sustainable business for agricultural producers
interested in going through the certification process necessary to enter this market. Organics have
continued to expand during the last few years, and industry experts are forecasting steady growth
of 9 percent or higher.3
Consumer, however, needs to be convinced in order to purchase labeled organic foods.
Thus, it is important to understand what does ‘organic food’ stands for in general. “Organic food
refers to food produced without using the conventional inputs of modern, industrial agriculture:
pesticides, synthetic fertilizers, sewage, sludge, genetically modified organisms, irradiation or
food additives.”4
The placement of organic products with labels and logos on the market is not already a
novelty. Significant numbers of consumers believe that the label grants the quality of the product.
In order to call the product organic it has to pass strict certification process that is different from
non-organic foods production.
“Consumer trust is a crucial issue in the market for organic food, since consumers are not
able to verify whether a product is an organic product, not even after consumption. An instrument
to gain consumer trust is third-party certification of the supply-side, which has a long tradition in
the organic sector in Europe.5 Organic certification logos are used to signal consumers that a
product is a certified organic product.”6
Certification is a tool to provide a common understanding of similarities and differences
between the organic food labels. “Still, calling certification a mode of regulation recognizes that
it involves standards that are often precise and prescriptive, plus rationalized procedures for
assessing compliance. In addition, certification initiatives’ structures for setting standards,
3
Organic Trade Organization, 2011, http://www.ota.com/about/accomplishments.html.
Allen, Gary J. & Albala, Ken, ed. (2007). The Business of Food: Encyclopedia of the Food and Drink Industries.
ABC-CLIO. p. 288. ISBN 978-0-313-33725-3.
5
Roe, B. and Sheldon, I. (2007). Credence good labeling: The efficiency and distributional implications of several
policy approaches. American Journal of Agricultural Economics 89(4):1020-1033.
6
Zorn et al. (2009) A comprehensive overview of the economic concepts surrounding organic certification is
presented in another CERTCOST publication.
4
4
enforcing compliance, and adjudicating disputes have evolved to look strikingly similar to state
and legal structures.”7
There is also an important role of state and non-state actors when certifying organic
products. The question, of whether inspection bodies act as private expert bodies that have
delegated powers by an official act and under government oversight or whether they operate as
agents of government fully integrated into the public administration of the respective member
state or whether their position is somewhere in between, varies among member states.
Unfortunately, it seems consumers do not have sufficient knowledge about the organic
production and the organic control system. Some of consumers are not even aware that the use of
the term ‘organic’ is strictly regulated. From the consumer’s perspective it is important to
determine whether the trust to the official authorities who are responsible for the granting the
‘stamp of quality’ is sufficient for their choice of organic food products.
Consumers’ ideas about organic labeling can differ and it is not sure if it would
make them buy such ‘value added’ products. Motivations for consumers can differ, starting from
their own health benefit to better environment protection. Security, quality or better taste is
another reason why would consumers go for organic foods. Beliefs about positive long-term
effects of the consumption of organic food can change the attitude towards non-organic food
forever. As the Centre for Microdata Methods and Practice stated the reasons that households are
willing to pay for organic differ, with quality being the most important, health concerns coming
second, and environmental concerns lagging far behind.8
Slightly higher price however, can discourage them even to get informed about the
importance of organic products. Some of the consumers can perceive organic food labeling
simply as a temporary ‘expensive’ trend. Another can consider organic labeling as a policy
instrument to expand trade. Lack of knowledge and trust can lead to decline of the sales of
organic products.
Demand for value-added products is highly segmented among different types of
consumers. Those consumers can have different preferences and willingness to pay for specific
organic products. Specific products can be purchased with motives that depend on every single
7
Meidinger, Errol (2006), 'The Administrative Law of Global Private-Public Regulation: the Case of Forestry ',
European Journal of International Law, 17 (1), p. 47-87.
8
Rachel Griffith and Lars Nesheim, Cemmap (2008) Household willingness to pay for organic products, The
Institute for Fiscal Studies Department of Economics, UCL.
5
customer. Understanding the types of consumers who purchase organic produce is particularly
important for growers, processors, and retailers since organic produce has long been considered a
‘gateway’ product with consumers often entering the organic market by first purchasing organic
produce and subsequently widening their purchases to include other organic products.9
“Consumer preferences for organic certification logos highlight the importance of
understanding the consumer perspective on the organic food regime. Consumer perceptions of
organic standards, certification and control are of subjective nature and in many cases not based
on objective knowledge. It needs to be admitted that any organic certification logo which is
neither mandatory nor already widely known among consumers will face severe difficulties in
trying to attract consumer preferences”10
To finalize, it is of crucial importance to understand that legal framework regulating
organic food standards protects consumer interests. It provides legal certainty that the products
claimed to be organic are properly certified and inspected, and therefore operators are able to
benefit from the consumer’s willingness to pay for the value added organic foods.
9
Hartman Group. 2000. The Organic Consumer Profile, The Hartman Group, Bellevue, WA. Hartman Group. 2002.
Hartman Organic Research Review: A Compilation of National Organic Research Conducted by the Hartman Group.
Bellevue, Washington.
10
Janssen, M. and Hamm, U. (2011b). Consumer preferences and willingness-to-pay for organic certification logos:
Recommendations for actors in the organic sector. Report of the CERTCOST project.
6
CHAPTER 2: EU Organic Legislation and Labeling
The number of organic products is rapidly growing on the global market. Consumers can have a
wider choice, however, no guarantee of quality. Therefore, it was important to establish organic
labeling system in the European Union. The introduction of the new organic logo should give
consumers space of mind, as they are sure that the product must adhere to EU standards on
organic products.
This chapter will explain why is the organic labeling so significant and how is it regulated
by EU law. Moreover, what are the requirements to be labeled with the new EU obligatory logo,
and why it is important are questions that will be answered.
In order to provide sustainable development of organic sector and ensure the effective and
efficient functioning of organic market, legal framework shall be established. Consumers’
confidence and demand was steadily growing from 90s, and organic production had to be
governed by the EU legal framework.
European Union entered the domain of regulating organic farming sector in the beginning
of the 1990s with Council Regulation (EEC) No 2092/91. “In 1991 the European Council of
Agricultural Ministers adopted Regulation (EEC) No. 2092/91 on organic farming and the
corresponding labeling of agricultural products and foods. The introduction of this Regulation
was part of the reform of the EU Common Agricultural Policy and represented the conclusion of
a process through which organic agriculture received the official recognition of the 15 states
which were EU members at the time.”11
In the following years organic production and labeling would be growing in importance.
‘Council Regulation (EC) No 834/2007 of 28 June 2007 on organic production and labeling of
organic products and repealing Regulation (EEC) No 2092/91’ were published as a new
regulation that came into force in 2009.
The mission of the new legal instrument is continuous and sustainable development of
organic farming and production. Another goal of this new legal framework is to reach high
standard of the quality of the products, environmental protection, biodiversity, and animal
protection. Therefore, the organic labeling is the important aspect of European organic food law.
11
European Commission, Agriculture and Rural Development, Organic Farming.2012
7
Area of the applicability of the Council Regulation (EC) No. 834/2007 of 28 June 2007
on organic production and labeling of organic products and repealing Regulation (EEC) No.
2092/91 is reaching agricultural products including yeast and aquaculture. This Regulation
applies to living or unprocessed products, processed foods and animal feed. Furthermore, seeds
and propagating material as well as collection of wild plants and seaweed is also included in the
scope of the Regulation.12
There have been additional Regulations adopted connected to the legislation mentioned
above. Those Regulations go more into the technical details. One of them is Commission
Regulation (EC) No. 889/2008 of 5 September 2008 with detailed rules on production, labeling
and control including its first amendment on production rules for organic yeast First amending
Regulation, establishing new production rules for the production of organic yeast. Another one is
Commission Regulation (EC) No. 1235/2008 of 8 December 2008 with detailed rules concerning
import of organic products from third countries.
Furthermore, organic production is the part of the General Food law. Therefore, organic
food must also comply with Regulation (EC) No 178/2002 “laying down the general principles
and requirements of food law, establishing the European Food Safety Authority and laying down
procedures in matters of food safety.”
13
Organic production has to comply also with general
legislation on food controls. Regulation (EC) No 882/2004 that was amended by Commission
Regulation (EC) No 776/2006 is a basis for “official controls performed to ensure the verification
of compliance with feed and food law, animal health and animal welfare rules.”14
“Food security is one of the most compelling global challenges. The rapid growth of the
world’s population puts great pressure on critical resources such as water, energy and food. Food
security will become an ever greater priority for the EU and the world as the global demand for
food increases and the challenges of sustainable production and equitable distribution become
increasingly acute.”15
12
European Commission, Agriculture and Rural Development, Organic Farming.2012
Council Regulation (EC) No 178/2002 laying down the general principles and requirements of food law,
establishing the European Food Safety Authority and laying down procedures in matters of food safety, L 31/1,
14
Commission Regulation (EC) No 776/2006 of 23 May 2006 amending Annex VII to Regulation (EC) No
882/2004 of the European Parliament and of the Council as regards Community reference laboratories, L 136
15
Special Eurobarometer 389 “Europeans’ attitudes towards food security, food quality and the countryside” ,
Conducted by TNS Opinion & Social at the request of the European Commission, Directorate-General for
Agriculture and Rural Development, Survey coordinated by the European Commission, Directorate-General for
Communication (DG COMM “Research and Speechwriting” Unit) , Special Eurobarometer 389 / Wave EB77.2 –
TNS Opinion & Social, July 2012.
13
8
“The new rules include the mandatory use of the EU organic logo on pre-packaged
organic products, and it can be accompanied by national or private logos. One of the key
developments of the European Organic Sector in 2010 was the launch of the new EU Logo for
organic products. Since July 1, 2010, the organic logo of the EU has been obligatory on all prepackaged organic products that have been produced in any of the EU Member States and meet
the necessary standards.”16
Before the new logo came into consumer’s awareness there was an old logo that was
voluntary. Producers that satisfied the European organic food standards could use the first logo,
however, it was not well-known. Too many national organic logos created confusion among
consumers. There was a need to have one common European logo for all 27 Member States.
Thus, European Union introduced its new EU organic logo that will help to avoid divergences
and to guarantee the uniform application of the organic production standards.
The all idea behind it started in 2009, when the European Commission introduced a new
competition for art and design students from all 27 Member States. The competition was about
creation of a new organic logo that would be used officially throughout the Union. It can be
better explained as Mariann Fischer Boel, European Commissioner for Agriculture and Rural
Development, said: "The new organic logo will bring identity to the organic sector in the EU. It
will help in creating the single market, and that's good news for producers and consumers.”17
Another interesting question is, once we have introduced new organic logo that is
mandatory basis for producers of organic foods, what are the requirements to be labeled as such.
Products certified as ‘organic’ must meet special organic standards. If the processed products
fulfill the European requirements for the organic farming sector, then they can be considered to
be in full conformity with the European Union law.
Basic requirement for legal use of the EU organic logo is that the ingredients of the
product should be at least 95% organic. EU labeling system does not recognize products that are
below 95%, nor products labeled ‘Made with organic ingredients’.
European organic labeling system is more focused on production aspect that on the
product itself. There is no indication how to measure or calculate if the product is organic.
16
IFOAM and FiBL ‘The World of organic agriculture-statistics & emerging trends 2011’ ISBN PDF version 978-3940946-84-3 (IFOAM) and 978-3-03736-194-8 (FiBL).
17
European Commission (2009) Mariann Fischer Boel, European Commissioner for Agriculture and Development ,
Press Release, Brussels.
9
However, the general organic farming rules remain. To illustrate, crop rotation, the prohibition of
the use of chemical pesticides and fertilizers, livestock shall have free range and no antibiotics
are allowed to treat the animals.
Organic production shall not use genetically modified organisms (GMO’s) and must
uphold natural cycles and systems. If the product contains GMO’s it must not be labeled as
organic. However, there is an exception of unintentional entrance into the organic product and the
proportion of the genetically modified organisms in the ingredient shall not be more than 0.9%.
Since 2012 the organic logo has to comply with the special model standard. EU organic
sector has two years for the transition of the new rules of labeling. In order to meet the necessary
standards in organic sector in the European Union it is inevitable to use the new organic logo. It
became obligatory starting from 1 July 2012 for all pre-packaged organic foods that were
produced within Member States. In case of non-packed and imported products the organic logo
will remain optional.18
Even though the new common organic logo was introduced, other national or private
logos are still allowed to come along with the ‘Euro-leaf’. Format of the logo should include also
the code of the controlling body and identify the Member State or the third county origin of the
farming. Moreover it has to present its organic production method such as product, its ingredients
or feed materials that were obtained in accordance with the organic farming rules. The code
number shall insist of reference number issued by the competent authority and it has to be
situated just below the organic logo.
According to the Commission Regulation (EU) No 271/2010 of 24 March 2010 format of
the logo is strictly defined. It can be defined as a combination of the European flag that has been
a symbol the European Union since 1986 and a green leaf that represents sustainability and
nature. 19
General organic logo appears as a white leaf created from twelve European stars on a
green background. The logo should be applied on the background of any color as far as it is easy
to distinguish. In case the background is in the same green color and it is not distinguishable, the
white outer line version shall be used. The EU organic logo can appear also in black or in dark
18
European Commission, Agriculture and Rural Development, Organic Farming, 2012
Commission Regulation (EU) No 271/2010 of 24 March 2010 amending Regulation (EC) No 889/2008 laying
down detailed rules for the implementation of Council Regulation (EC) No 834/2007, as regards the organic
production logo of the European Union, L 84/19
19
10
color if the printing process does not accept the application of the main green color. This version
can be printed on the light colored background only. In case a product’s package has a dark
background it is possible to print the logo in the light or white version. Any other colors are not
allowed.
European organic labeling policy defines a special size of the logo. It can appear in every
scale; however, the minimal size represents 13, 5 mm by 9 mm. The EU Organic logo may be
associated also with private or regional organic logos; if they do not change the shape or view of
the main logo. European organic logo should not be changed by any text, visual elements or
shape.
The organic logo is getting well known and it should be regarded as unchangeable.
According to the EU Commissioner for Agriculture & Rural Development Dacian Cioloş public
awareness of a new symbol plays a crucial role: “Our hope is that the EU logo can further
develop into a widely recognized symbol of organic food production across the EU, providing
consumers with confidence that the goods are produced in-line with the strict EU organic farming
standards”20
To conclude, European organic labeling is growing on the importance and therefore,
European legal framework is expanding rapidly. It was explained in this chapter, that producer
who wants to represent his product as ‘organic’ within European Union must meet certain
requirements laid down in the Regulation 834/2007 (EC). It is inevitable to mention that, the
introduction of the new EU mandatory organic label provides more transparent and trustful
organic market not only for consumers but also for producers. Consequently, organic labeling and
its new EU logo is a crucial part of current organic national and international regime.
20
European Commission (2012) Dacian Cioloş, Commissioner for Agriculture and Development , Press Release,
Brussels.
11
CHAPTER 3: US Organic Legislation and Labeling
Consumers are becoming increasingly concerned with the quality, safety and production
attributes of their food.21 Organic food industry within USA is growing since early 1990’s.
Organic products are simply an outcome of many U.S distributors and manufacturers that put an
effort in specializing in processing and marketing within organic sector. This steep growth of the
industry has led to various new governmental activities such as research, education, and
regulatory programs on organic agriculture in the U.S. Department of Agriculture.
“The U.S. Department of Agriculture (USDA) introduces the Organic Foods Production
Act (OFPA) as part of the 1990 Farm Bill. The three main goals of the OFPA were to establish
standards for marketing organically produced products to assure consumers that organic products
meet a consistent standard, and to facilitate interstate commerce”22
OFPA created National Organic Standards Board (NOSB) in order to have clearer rules
and standards of which substances can be used in organic production and which not. NOSB’s
main activity is to recommend to the National Organic Program (NOP) about whether the
substance should be forbidden in organic production. There was also created National List of
Allowed and Prohibited Substances.
Organic products that want to access the market must be processed and produced in
accordance with the NOP standards. National Organic Program introduced its own labeling
requirements that apply to fresh, raw products and processed products that contain agricultural
ingredients.
The implementation of the NOP national standards, labeling guidelines and uniform
USDA organic seal has created a stronger consumer confidence and transparency in the organic
agricultural sectors. All the products that are labeled, purchased or presented as organic must
comply with the USDA regulations. “These regulations require that organic growers and handlers
(including food processors) be certified by a State or private agency accredited under the uniform
21
Caswell, J.A. (1998) How Labeling of Safety and Process Attributes Affects Markets for Food, Agricultural and
Resource Economics Review 27(October): p. 151-158.
22
Carl K. Winter and Sarah F. Davis (2006) Organic Foods, Journal of food science, Vol. 71 Nr. 9.
12
standards developed by USDA, unless the farmers and handlers sell less than $5,000 a year in
organic agricultural products.’’23
Even though I had already defined what the term ‘organic’ means in general, it is
important to see how the legislation was made in the United States. National Organic Program
(NOP) regulation offers a codified set of requirements for agricultural products to be labeled as
organic. According to the NOP regulation, section $205.300 states that the use of the term
‘organic’ and its derivations “may only be used on labels and labeling of raw or processed
agricultural products, including ingredients that have been produced and handled in accordance
with the regulations in this part. The term ‘organic’ may not be used in a product name to modify
a nonorganic ingredient in the product.”24
In line with USDA regulation, producers and handlers must meet the specific organic
standards whether they want to use the word ‘organic’ or the USDA organic seal. The use of the
USDA seal is in comparison to the ‘Euro leaf’ not compulsory on food, feed or fiber. In
accordance with the USDA rules all the organic procedures have to reveal that biodiversity is
conserved and natural resources are protected. Moreover, it must be shown that only permitted
substances pursuant to National List of Allowed and Prohibited Substances were used.
Consequently, all organic foods are coming from certified farms or handling operations.
U.S. labeling system recognizes four types of organic indications conforming to the
product composition.
Firstly, if there is a claim of ‘100% organic” the product must be
composed from 100% organically produced and certified ingredients. Any processing aids must
be organic as well and it may not contain any additives from the National List of Allowed and
Prohibited Substances. 25
Secondly, if the product is represented as ‘organic’ it must contain at least 95%
“organically produced raw or processed agricultural products. Any remaining product ingredients
must be organically produced, unless not commercially available in organic form or must be
23
Carolyn Dimitri and Catherine Greene (2000) Recent Growth Patterns in the U.S. Organic Foods Market,
Agriculture information bulletin.
24
NATIONAL ORGANIC PROGRAM Title 7: Agriculture; PART 205—;Subpart D—Labels, Labeling, and
Market Information; 7 C.F.R. § 205.300(a); (effective in November 2011)).
25
NATIONAL ORGANIC PROGRAM, Agricultural Marketing Service, U.S Department of Agriculture, 2012
13
nonagricultural substances or non-organically produced agricultural products produced consistent
with the National List...”26
Both terms ‘100% organic’ and ‘organic’ may include USDA organic seal. However,
there is a third claim- ‘made with’ organic – where use of the USDA organic seal is not allowed.
The product in the ‘made with’ category must comprise of at least 70 % organically produced
elements. That is to say, 30% could be any agricultural nonorganic product made without
excluded methods, sewage sludge, or irradiation. Besides, use of synthetic fertilizers and
pesticides that are not on the National list may be included into the 30% mentioned above.27
In the last place there is a category of products with less than 70 percent organically
produced ingredients. The term ‘organic’ may be placed only on ingredient placement together
with the percentage of the organic substances. Residual ingredients are not requested to follow
the USDA organic regulations. Multi-ingredient product that contains specific organic ingredients
does not have to be certified.28
All the labeling categories of the organic products noted above shall be produced without
excepted methods such as genetic engineering, ionizing radiation, or sewage sludge. Those
organic products sold, labeled, or represented as ‘100% organic’, ‘organic’, ‘made with’ organic,
or products with less than 70 percent organic ingredient shall exclude water or salt. Product
composition varies according to the certified organic ingredients expressed by the certain
percentage.
Section § 205.302 of the NOP regulation provides how to calculate the percentage of
organically produced ingredients. “The percentage must be determined by the handler who
affixes the label on the consumer package and verified by the certifying agent of the handler. The
handler may use information provided by the certified operation in determining the percentage.”29
“Organic meat is a special field of organic farming where animals raised are not allowed
to be fed antibiotics, growth hormones or other artificial drugs. It is also not allowed to be fed by
genetically modified foods. Organic animal producers are generally prohibited from using
antibiotics, and there is an argument that this prohibition could theoretically result in increased
26
NATIONAL ORGANIC PROGRAM Title 7: Agriculture; PART 205—;Subpart D—Labels, Labeling, and
Market Information; 7 C.F.R. § 205.301(b); (effective in November 2011)).
27
NATIONAL ORGANIC PROGRAM, Agricultural Marketing Service, U.S Department of Agriculture,2012
28
NATIONAL ORGANIC PROGRAM, Agricultural Marketing Service, U.S Department of Agriculture,2012
29
NATIONAL ORGANIC PROGRAM Title 7: Agriculture; PART 205—;Subpart D—Labels, Labeling, and
Market Information; 7 C.F.R. § 205.302(c); (effective in November 2011)).
14
pathogen levels and elevated microbiological safety risks. However, research findings in this area
are inconsistent.”30
“The prohibition of antibiotic use in organic animal production also appears to be
responsible for the lower incidence of antimicrobial resistance in bacterial isolates from
organically raised food animals compared with conventionally raised food animals. This has been
demonstrated in several studies and is concisely summarized in an IFT expert report.31
Healthier environment, wider range for the animals and better working conditions for the
farmers can add value for the organic product. However, the organic meat products cost mostly
twice as much as conventional meat, therefore, just a small amount of the buyers can afford it.
Some of the consumers simply do not know the difference between conventional meat and
organic meat and they do not perceive it necessary to pay more for them, for the same product.
This is one of the reasons why the awareness about organic labeling is so important.
In accordance to the latest press release by Organic Trade Association: “awareness of the
USDA Organic seal has also grown, with more consumers more likely to look for the seal when
shopping for organic products. Moreover, over four in ten parents (42 percent) say their trust in
organic products has increased, versus 32 percent who indicated this point of view a year ago. In
fact, younger, new-to-organic parents are significantly more likely to report improved levels of
trust in organic products. Consumer trust is on the upswing for organic as the gold standard when
seeking to avoid toxic and persistent pesticides, antibiotics, synthetic hormones, genetically
engineered ingredients, and additives.”32
USDA organic label and U.S organic regulations were introduced as the standards of the
organic agriculture were not applied uniformly; there was lack of data and limited resources for
the proper organic industry. Therefore, National Organic Program goal was to set clear standards
that would lead to better consumer protection. To conclude, uniformly labeled organic products
can access the market better and more equivalence agreements with foreign countries can be
concluded. Better technology and research can provide more economic opportunities and enhance
local and regional connections.
30
Carl K. Winter and Sarah F. Davis (2006) Organic Foods, Journal of food science, Vol. 71 Nr. 9.
Carl K. Winter and Sarah F. Davis (2006) Organic Foods, Journal of food science, Vol. 71 Nr. 9.
32
Barbara Hautman (2013) Eight in ten U.S. parents report they purchase organic products, Organic Trade
Association’s (OTA’s) newly released 2013 U.S. Families’ Organic Attitudes and Beliefs Study, conducted Jan. 1824.
31
15
CHAPTER 4: Certification of Organic Food According to American
Standards
The organic certification system in the U.S was established in order to guarantee that the quality
of organic products is ensured, and consumers are not misled when buying those foods.
Formation of certification system is dating back to 90s when the first legal instrument was
introduced. In this chapter will be described certification of American organic food from the
substantive and procedural view.
The starting point of certification movement was in the 1980s, when multiple
organizations in the United States offered certification to different, and often conflicting, organic
standards. Coupled with fraud, and consequently resulting in consumer mistrust created a need
for Federal standards and oversight. The Organic Food production Act of 1990 introduced
national standards for the production and handling of organic agricultural products. The Act
authorized USDA to create the National Organic Program, which is fully responsible for
developing, and ensuring compliance with, the USDA organic regulations.33
It is essential to examine what does organic certification means. It is a procedure by
which a certification authority issues written affirmation that a service, process or product is in
conformity with certain standards.
Organic certification confirms that individual organic
business situated anywhere in the world satisfy the USDA organic regulations. Compliance with
the U.S Department of Agriculture organic rules allows the individual to label, sell and promote
the products as organic. These organic regulations define exact standards that are required in
order to use the USDA seal or simply word “organic” on food, feed or fiber products.
Some of the organic businesses must be certified and some not. If the gross annual
organic sales represent more than 5000 dollars it is an obligation to be certified. If the farm or
business gets less than amount mentioned it is optional to obtain organic certification. Owners of
the organic businesses, however, need to know what types of products are eligible to be certified.
33
Ann H. Baier, National Center for Appropriate Technology (NCAT) and Lisa Ahramjian Agriculture Specialist
and, National Organic Program (NOP) Publications Manager, November 2012.
16
According to USDA standards there are four types of organic production: crops and wild crops,
livestock, and processed or multi-ingredient products.34
Entities that are granting certification are called certifying agents. These agents that could
be private, foreign or State are accredited by the USDA and situated throughout the world,
especially the United States. The responsibility of the certifying is not simple as it must be
ensured that USDA organic standards are not violated. Agents are officially listed online and it is
up to producer or handler to choose which possibility would be the most convenient.
When the producer or handler chooses the certifying agent it would be clever considering
certain factors. Even though each of these agents is accredited to issue an equivalent organic
certificate complying with USDA regulations, the distance might be important factor. Distance to
the farm or business should not be inconvenient for both handler and certifier. Accreditation to
other standards and fee structure can be another criterion. Owner of the organic business might
also take into account additional services, such as educational and member benefits. After
convenience considerations for the organic producer or handler there are some procedural
requirements that should be followed in order to get the certification.
Firstly, application and fees must be submitted to a USDA accredited agent for organic
certification. Submitted application must describe operation that wants to be certified together
with list of substances used during the previous three years. Prohibited substances must not be
used on any land to produce raw organic materials for the previous 36 months.
In addition, it is necessary to include into the application the names of the processed,
raised, or grown organic products. Every applicant must also submit Organic System Plan (OSP)
in written form. This plan must consist of detailed description of the practices and substances to
be used to land.35
Second step after the submitting of application is to wait for the agent to review the
materials whether the practices are in compliance with the regulations. If the written application
is according to USDA organic standards inspector will be scheduled to visit the farm or business
to confirm it. Inspector must verify that the Organic System plan is pursued and records properly
maintained in order to issue a report about the compliance of the USDA organic regulations.
34
Ann H. Baier, National Center for Appropriate Technology (NCAT) and Lisa Ahramjian Agriculture
Specialist and, National Organic Program (NOP) Publications Manager, November 2012
35
Ann H. Baier, National Center for Appropriate Technology (NCAT) and Lisa Ahramjian Agriculture
Specialist and, National Organic Program (NOP) Publications Manager, November 2012
17
Last step of the certification is evaluation of the application and inspector’s report to
ascertain if the handler or producer complies with the organic standards. If the materials
submitted are in accordance to USDA organic regulation accredited certifying agent will grant
the certificate. Organic certificate is valid only for one year and then all the procedure must be
repeated.36
It is important to bear in mind that if an operation violates the USDA organic regulation it
is not possible to claim the products organic and sanctions can be applied. Sanctions have form of
financial penalties or deprivation of organic certificate. “Certification provides 3rd-party
assurance that a product was raised, processed, and distributed to meet the official organic
standards. This process also reduces the practice of falsely labeling products as organic. In the
United States, manufacturers can receive penalties of up to $10000 for inappropriate use of the
organic label”37
This chapter provides information about organic certification policy in the United States.
Certification process comprise of several procedural steps that must be followed by the producer
or handler of organic business wishing to be certified. The certification is a key element of
organic food chain and it is necessary to encourage more and more producers and handlers to be
certified in order to raise consumers’ confidence.
36
Ann H. Baier, National Center for Appropriate Technology (NCAT) and Lisa Ahramjian Agriculture Specialist
and, National Organic Program (NOP) Publications Manager, November 2012
37
Carl K. Winter and Sarah F. Davis (2006) Organic Foods, Journal of food science, Vol. 71 Nr. 9.
18
CHAPTER 5: Certification of the Organic Food According to European
Union Standards
Certification refers to the confirmation of certain characteristics of the product. It provides
assurance for consumers that the products they pay the added value for are with the organic
quality. There are strict rules when it comes to certification in the European Union, which will be
described in this chapter.
Codex Alimentarius guidelines that state international food standards, define certification
as “the procedure by which official certification bodies and officially recognized bodies provide
written or equivalent assurance that foods or food control systems conform to requirements.
Certification of food may be, as appropriate, based on a range of inspection activities which may
include continuous on-line inspection, auditing of quality assurance systems, and examination of
finished products.”38
As the organic market started to grow from the beginning of 90’s there was an urgent
need to develop some rules that will assure some guarantee for both farmers and consumers. The
relationship between the producers and consumers evolved into more impersonal stage. Simply
verbal promise was not sufficient to protect both sides from fraud or unfair manners and therefore
it could lead to an incentive to cheat. “The need for more formalized systems became apparent in
order to, both; protect consumers from fraud and to protect producers from unfair competition.”39
In the Europe binding standards for certification became prerequisite for more transparent
organic market and confidence of the trading parties. “The first national private standard of
organic farming was established in Great Britain in 1973 and the first national regulation that
served as a public standard in the European Union was adopted in 1983 in Austria.40
Certification systems in the European Union did not have any significant changes even
with the amendments. The first legal instrument was adopted in 1991 with the aim to have a
competitive market between producers. It was apparent that the Council Regulation (EEC)
2091/91 on organic production of agricultural products and indications referring thereto on
38
Codex Alimentarius Commission (1995). Principles for food Import and Export Certification and Inspection.
Schmid, O. ( 2007). Development of standards for Organic Farming. In: Organic farming: an international history.
p. 152-174, Ed. W. Lockeretz. Walingford, Cambridge: CABI.
40
Lampkin, N.C. Foster, S. Padel and P. Midmore (1999) The Policy and Regulatory Environment for Organic
farming in Europe. Stuttgart- Hohenheim: Universitat Hohenheim.
39
19
agricultural products and foodstuffs was issued to make sure that organic production methods
would be handled in the most transparent way.
This regulation set for the first time a minimal standard for definition of how the organic
food has to be processed and produced. According to the EU law, Member States have to prove
the quality by setting up a reliable control system. This Regulation was subsequently amended in
2007 with the effectiveness from 1 January 2009. Article 27 of
current Regulation says:
“Member States shall set up a system of controls and designate one or more competent authorities
responsible for controls in respect of the obligations established”41 As there are currently 27 EU
Member States it is understandable that not every state can have exactly the same control system.
European legislation defines certification bodies as “control bodies”. Those bodies control
the compliance and issue certificate or “approval”. There are three general types of the control
systems within the European Union. Firstly, there is a system of approved private control bodies.
Secondly, system of a designated public authority or authorities that is in place in some Member
States. Lastly and the most often used is the system of a designated public authority and approved
private control bodies.
Generally speaking, all three types of the controls share the same basic characteristics.
According to the Regulation 834/2007 any operator who wants to place organic products on the
market must notify his activity to the competent authorities of the Member State where the
activity is carried out.42 This rule applies also for organic operator who produces, prepares or
imports any organic products. In practice, however, it is not the operator himself to notify to the
competent authority. Notification is usually carried out by the control body responsible for the
operator.
Any organic operators are controlled for compliance with the organic standards. If the
activities of the organic handler or producer comply with the standards, control authority,
depending on the system of operation in every Member State will issue a certificate. The
certificate gives the producer right to represent and label produced products as ‘organic’. It
assures the cohesion to the European organic standard and provides for a quality recognized
indicator.
41
Council Regulation (EC) No 834/2007of 28 June 2007on organic production and labeling of organic products and
repealing Regulation (EEC) No 2092/91, Art.27(1).
42
Council Regulation (EC) No 834/2007of 28 June 2007on organic production and labeling of organic products and
repealing Regulation (EEC) No 2092/91, Art.28.
20
Control bodies are not only appointed by the certain Member State but also have to be
subject to the accreditation. Accreditation is a procedure by which private or public accreditation
authority grants an official acknowledgment that a control body is able to provide certification
and inspection services. It is stated that from 1 January 2009 approved control bodies in the
European Union must be accredited to the European Standard EN 45011 or ISO Guide 65.43
One of the options for the control body is to be accredited under the EN 45011 that stands
for recognized standard for product certification in the Europe. The aim of this European standard
is to ensure that the certification of the products is meeting identifiable quality criteria. The
standard was maintained since 1989 with the objective of giving confidence to the final
consumers. It is expected that inspections, testing and controls ensure that the quality standards
are in compliance with the EU organic standards. The compliance with the standard should be
approved by a certificate or license to a supplier. There are just a few main requirements of EN
45011. Inspections must be performed by a third party of independent inspectors. In addition,
normative documentation should be available in order to measure the standards.
Another option for the control body to be accredited is to use ISO Guide 65. ISO is an
international body for setting standards with a network of 162 national members out of the 205
total countries around the world. The International Organization for Standardization (ISO) is one
of the oldest ones founded in 1940’s and its headquarter is based in Switzerland. It is an
independent, non-governmental organization developing an international standards on voluntary
basis. According to ISO Guide 65 “accreditation shall only be granted to a body which is a legal
entity, and will be confined to declared scopes and locations. The accreditation scope for a
product certification body should identify the certification schemes, products and normative
documents used for the certification.”44
After the control body is accredited by the European EN 45011 or international ISO 65
standards, the body has a competence to provide inspections and certification services. However,
it still needs to be approved by the competent authority of a Member State. Currently applicable
Regulation on organic production and labeling of organic products provides that the competent
43
Council Regulation (EC) No 834/2007of 28 June 2007on organic production and labeling of organic products and
repealing Regulation (EEC) No 2092/91, Art.27(5)(c).
44
IAF: International Accreditation Forum, Inc., IAF Guidance on the Application of ISO/IEC Guide 65:1996,
General Requirements for Bodies operating Product Certification Systems, AF-GD5-2006 Issue 2.
21
authority may confer its control competences to one or more control authorities and/or delegate
control tasks to one or more control bodies.45
European organic control system has two dimensions: national dimension supervised by
the Member States and European dimension supervised by the European Commission. Controls
on national level shall be carried out objectively and independently. In addition, the competent
authority shall verify the effectiveness of its controls, take notes of infringements found, and
withdraw the organic certificate issued when necessary. Additionally, Member States shall
attribute a code number to each control authority performing control tasks.46
There is vague formulation of the part of the article defining how the competent
authorities delegate powers of the control tasks. Article 27(8) of Regulation mentioned above in
accordance with Article 5(3) of Regulation (EC) No 882/2004 states: “competent authorities
delegating control tasks to control bodies shall organize audits or inspections of control bodies as
necessary.” As far as I am concerned, word “necessary” does not define how often or when
exactly the inspections should be carried out. So even though, the producers and handlers of
organic farms and businesses are inspected every year the relevant control bodies are not.
Supervision of certification bodies is handled on the national level; however, information
about effectiveness of the controls shall be reported to the European Commission on a yearly
basis. All the control bodies and control authorities approved by both national authorities together
with accreditation body are listed on the official List of Control Bodies issued by the European
Commission. As provided in Article 35(b) of Council Regulation from 2007 Member States shall
regularly transmit “lists of control authorities and bodies and their code numbers and, where
appropriate, their marks of conformity. The Commission shall publish regularly the list of control
authorities and bodies.”47
To make clear, if the organic operator wants to place on the market product with the
European organic logo, certification is compulsory. An operator that has been previously
involved into the producing conventional products has to undergo a conversion period of two
years. After successful compliance of the EU organic rules during the two year period, operators
45
Council Regulation (EC) No 834/2007of 28 June 2007on organic production and labeling of organic products and
repealing Regulation (EEC) No 2092/91, Art.27(4).
46
Council Regulation (EC) No 834/2007of 28 June 2007on organic production and labeling of organic products and
repealing Regulation (EEC) No 2092/91, Art.29(9).
47
Council Regulation (EC) No 834/2007of 28 June 2007on organic production and labeling of organic products and
repealing Regulation (EEC) No 2092/91, Art.35(b).
22
are granted a certificate and their products can be legally sold as organic. If there is a producer
that wants to produce both conventional and organic products, both operations throughout all the
production process must be separated from each other.
Moreover, it is possible to be certified on voluntary basis for private standards. As
certification against Council Regulation (EC) No 834/2007 is obligatory for the products sold on
the European market, private standards could be either stricter or equivalent. For example,
Demeter that is a Danish organic standard exceeds and supplements the EU Regulation with its
own production standards.
Even though the certification process is not simple and cheap alternative for organic
operators, it provides consumers with reliable identifiable organic standard. Once a product has
been certified in one of the Member States it has to be automatically recognized within all
European Union. Certification of the organic business gives the producer advantage of using
European organic label that is more and more recognizable by the consumers. Thus, buyers of
organic food products have assurance of organic quality EU-wide.
23
CHAPTER 6: International Standards in Relation to the WTO and Public
Versus Private Organic Standardization
This chapter critically examines, whether organic food trade is regulated by the international
guidelines or whether the WTO agreements are applicable and till what extent. The chapter has
been divided into three parts. The first part deals with the World Trade Organization and
agreements related to food trade, namely The Technical Barriers to Trade Agreement (TBT) and
Sanitary and Phytosanitary Measures Agreement (SPS).
Second part of the chapter will examine important role of The International Federation of
Organic Agricultural Movement (IFOAM) and The Codex Alimentarius Commission. In
addition, I will try to defend the view why one codified set of common rules of organic standards
would not be a good idea. Third part will look at public versus private organic food
standardization and current applicability and interconnection.
International harmonization of the organic standards can be perceived as a reasonable
food policy goal. It could reduce barriers to trade and open the door for international organic
market. However, organic standards are not in current state harmonized internationally. This
chapter will outline that even if there are international standards in the organic sector, it is not
enough to upheld international trade and the World Trade Organization rules.
Global trade in organic food is growing rapidly, and therefore the standards for organic
products can represent a technical barrier to open trade used by the governments. It seems
reasonable that specific organic standards are created on purpose, as international competition
can be a significant threat for the domestic producers of organic food.
6.1 The TBT and SPS agreements within the framework of WTO
The World Trade Organization (WTO) is an organization that intends in the opening of
international trade. The WTO was born in 1995 and acts as an organization handling the global
trading rules between participating countries. The organization administrates a framework for
negotiating trade agreements and tries to resolve disputes on the international trade field. There
is a big endeavor to enforce the members in loyalty to WTO itself and its agreements.
The World Trade Organization concluded two important agreements that are integrated
into the WTO legal framework. The Technical Barriers to Trade Agreement (TBT) and Sanitary
24
and Phytosanitary Measures Agreement (SPS) are multilateral agreements that are to be accepted
as a whole. The major problem, however, with these agreements is that they do not address
specifically organic standards, and therefore the common rules can be avoided by national
measures causing barriers to trade.
The Technical Barriers to Trade Agreement (TBT) is an international agreement
concluded in order to eliminate trade barriers that can potentially be caused by the regulations,
certifications procedures, and standards and, testing. Despite its safety and efficacy, the question
remains whether the TBT agreement also covers the organic food standards. “While the WTO
agreements have rules for scientifically based policy measures adopted to protect human, animal
or plant health or life, there is some disagreement on whether the WTO’s Agreement on
Technical Barriers to Trade (addresses food labeling) covers production standards based on
ethical values such as those defining organic food standards.’’48
Whether the organic standards are covered by the TBT agreement or not is a current
discussion. However, in assumption of the fact that domestic standards shall be based on the
international standards in general, organic standards would be covered by the international rules.
Nevertheless, there is a possibility to introduce stricter standards on the national level.
Even though, WTO members of the governments are permitted to introduce stringent
domestic standards than international ones, it should not lead to discriminatory practices. With
the respect to the central government bodies, TBT agreement states: “Members shall ensure that
in respect of technical regulations, products imported from the territory of any Member shall be
accorded treatment no less favorable than that accorded to like products of national origin and to
like products originating in any other country.”49
The issue of less favorable treatment, however is not easy to solve as there are too many
standards and certification systems in existence. Moreover, public health and safety justification
by the national authorities is mostly accepted. Neither standards, nor certification rules are not
binding and harmonized on the international level. Even if the current state of affairs is often
criticized, there is simply no legal instrument to forbid members to use higher standards that
could affect the international trade.
48
Carsten Daugbjerg, (2012) The World Trade Organization and organic food trade: potential for restricting
protectionism?, Institute of Food and Resource Economics, University of Copenhagen.
49
Uruguay Round Agreement: Agreement on Technical Barriers to Trade (TBT), Technical Regulations and
Standards, Article 2: Preparation, Adoption and Application of Technical Regulations by Central Government
Bodies, (2.1).
25
It should be mentioned that trade restrictions related to health safety are addressed by both
the TBT Agreement as well as by Sanitary and Phytosanitary Measures agreement. However,
there is a difference of their applicability. SPS measures are typically focused on certification
related to food safety, animal and plant health, while TBT measures are dealing mostly with the
food composition and its labeling and packaging.
Another international agreement entitled Sanitary and Phytosanitary Measures
Agreement (SPS) sets basic rules on food safety and animal and plant health standards. “It allows
countries to set their own standards. But it also says regulations must be based on science. They
should be applied only to the extent necessary to protect human, animal or plant life or health.
And they should not arbitrarily or unjustifiably discriminate between countries where identical or
similar conditions prevail.”50
The trade of agricultural products has always been a delicate point in multilateral
relations. Reluctance by the WTO members to stick to agreed international rules and apply them
in their territories might lead to the irrational barriers to trade. Even though, it is often analyzed
weather the WTO agreements discussed apply to organic food trade, it is at the heart of our
understanding that imported products should not be treated less favorable than domestic products.
6.2 IFOAM and Codex Alimentarius Commission
In addition to the WTO agreements, there are two present international sets of organic food
standards: The International Federation of Organic Agriculture Movements (IFOAM) and the
Codex Alimentarius guidelines. Even though, neither of them is binding they are having
significant influence on global trade of organic product.
The International Federation of Organic Agriculture Movements is a global trade
institution for the organic agriculture action with around 750 member bodies from 116 countries.
IFOAM stands for a private umbrella organization accepted worldwide. IFOAM guidelines are
setting standards for production process as well as for accreditation bodies. Its mission is defined
as: “leading, uniting and assisting the organic movement in its full diversity. Our goal is the
50
WTO (2013) Understanding the WTO, Handbook at WTO official website, ISBN: 978-92-870-3748-0.
26
worldwide adoption of ecologically, socially and economically sound systems, which are based
on the principles of Organic Agriculture."51
IFOAM developed its own guarantee system for common organic standards. “The
Organic Guarantee System (OGS) unites the organic world by providing a common set of
standards for organic production and processing, and a common system for verification and
market identity. It fosters equivalence of participating certifiers and thereby facilitates the trade
of organic products between operators certified by different participating certification bodies.”52
OGS gives an opportunity to label organic products with the IFOAM seal and logo of accredited
certifier.
The Organic Guarantee System’s norms are divided into the IFOAM Basic Standards
(IBS) and the IFOAM Accreditation Criteria (IAC). Those norms, however, are not binding.
Their role is to provide a flexible guidelines instead of binding legal instruments.
“The IFOAM Basic Standards (IBS) provide a framework for certification bodies and
standard setting organizations worldwide to develop their own certification standards and cannot
be used for certification on their own. Certification standards should take into account specific
local conditions and provide more specific requirements than the IFOAM Basic Standards.”53
Second set of norms is the IFOAM Accreditation Criteria that shall be met in order to be
internationally certified. Under the IAC requirements certification authority must verify if the
certification process that includes operator’s practices and procedures are in accordance to
IFOAM organic standards.
To clarify, IFOAM is a global organic actor that has its own standards of organic
products. It is represented by the basic international standards and accreditation standards that are
addressed to its members or potential members. Those standards are flexible and consequently do
not have any legal power over the national governments.
Another important actor on the organic global scene is The Codex Alimentarius
Commission. The body was appointed in 1963 by the World Health Organization (WHO) and
Food and Agriculture Organization of the United Nations (FAO). It operates as an
51
International Federation of Organic Agriculture Movements( IFOAM) , Program 2011 at the official IFOAM
website.
52
“The IFOAM Basic Standards for organic production and processing”, version 2005 at the official IFOAM
website.
53
“The IFOAM Basic Standards for organic production and processing”, version 2005 at the official IFOAM
website.
27
intergovernmental body that has more than 170 members from different countries. Codex
Alimentarius is a set of international food standards that can be used by national governments as
a basis for their own standards
This international food code has become the global reference point for consumers,
national food control agencies and the international trade. The guidelines advice that: “When
formulating national policies and plans with regard to food, governments should take into
account the need of all consumers for food security and should support and, as far as possible,
adopt standards from the … Codex Alimentarius or, in their absence, other generally accepted
international food standards”54
The Codex Alimentarius likewise the IFOAM guidelines provide only helpful instruments
for creation of national standards. Even though, there are strong intentions to become worldwide
respected recognized standards, it seems to be less likely. The question is why would the member
states simply allow one international organization to define the common standards? With good
judgment, every state has its own culture, different legal order, and conditions for organic
farming that cannot be liberalized.
Daugbjerg’s proposes that “binding Codex organic standards would clearly be the most
powerful approach to create a level playing field for organic trade.”55 However, it seems that it
could also create inconsistencies in the common standards. More control and enforcement bodies
would have to be established and it would be extremely difficult to discipline all the states to
follow one set of binding standards applied to organic trade.
Needless to say, Codex Alimentarius can be a useful tool for trade disputes resolution.”
The reference made to Codex food safety standards in the World Trade Organizations'
Agreement on Sanitary and Phytosanitary measures (SPS Agreement) means that Codex has far
reaching implications for resolving trade disputes. WTO members that wish to apply stricter food
safety measures than those set by Codex may be required to justify these measures
scientifically.”56
Three main international legal instruments regulating organic food were analyzed in this
chapter. WTO involvement together with international organizations as IFOAM or Codex
54
Codex Alimentarius Commission’s booklet: “ Understanding The Codex Alimentarius”, third edition, Issued by
the Secretariat of the Joint FAO/WHO Food Standards Program, FAO, ROME 2006, ISBN 978-92-5-105614-1.
55
Carsten Daugbjerg, (2012) The World Trade Organization and organic food trade: potential for restricting
protectionism?, Institute of Food and Resource Economics, University of Copenhagen.
56
Codex Alimentarius (2013) Information found on official site: “About Codex”.
28
Alimentarius Commission lack legitimacy on the national level. Therefore, organic standards
provided by those organizations are used more as a base for developing national standards instead
of having binding legal power over the national governments.
Some argue that one codified set of common rules of organic standards would lead to
more transparent and efficient organic trade around the world. However, in my opinion binding
organic standards on the international level would create less transparency, confusion for
consumers, and decrease of worldwide market demand of organic food. To illustrate, European
organic standards or U.S standards of the organic products are set according to their own
production conditions, consumer perceptions, culture, and different legal orders. Variations of
those factors are apparent and liberalization of the international organic standards is impossible.
Therefore, the most suitable approach for regulating organic standards is to have continental rules
instead of having common international organic rules.
6.3 Public versus Private organic food standardization
Clear standards of organic production play a crucial role for the global market. Market
transparency is upheld by consumer’s confidence and trust into the control system. Therefore, the
main objective of standardization is to avoid fraud and fake organic claims. The role of the
private and state bodies in organic food standardization shall be described in this subchapter. In
addition, relationship between WTO and private bodies will be examined.
Standardization of organic food can be understood as an endeavor of public or private
bodies to issue common rules of organic farming and organic trade. Those standards are explicit
and in written form, providing additional insurance for consumers that organically certified food
has the claimed quality features.
The concept of standardization across borders can be described also as a particular type of
governance. “Standardization can be seen as a new type of ‘multi-level-governance’ that cuts
across national as well as organizational borders. Although, standardization, understood broadly,
is far from a new phenomenon, we note an increasing demand and supply of standards aimed at
efficient management, quality assurance, environmentally and socially responsible behavior, and
so forth.”57
57
Busch, L. (2000). “ The moral economy of grades and standards” Journal of Environmental Policy and Planning 5:
p. 165-180.
29
Moreover, standardization evolved into the certification and labeling schemes. Initially it
was not state bodies to set specific organic standards. It had started with the private bodies or
simply farmers that wanted to ensure consumers that the products they produce have certain
quality. “ Originally, most organic labeling schemes were based on the private sector governance
model in which the private sector, typically organic producer associations sets the organic
standards, operated the labeling schemes, certified and monitored organic producers and
processors”58
Private standards, in contrast to public standards are set by a certain private or umbrella
organization and in general can be stricter than the standards adopted by public bodies. Regional,
national or international private organic bodies can use their standards as a competitive advantage
as being different from the state standards. Although different organic products with different
labeling schemes does not guarantee better position on the market, consumers that are aware of
the fact that the standards are stricter than the state ones, could show a high appreciation.
Even though, the private standards are step-by-step disappearing, some countries around
the world did not introduce state standards until 2009. Therefore, it is becoming more likely to
have basic state rules for organic production, which must be accepted and followed. Simply put,
state body is acting as an authorizer of private bodies.
Daugbjerg is defining the current model in the most of the countries as an ‘arm-length
governance’ model in which the government sets the minimum standards and licenses private
certification bodies to monitor and certify the organic production.59 These certification bodies
might apply state baseline requirements, however, also adopt stricter standards for certain aspects
of organic farming.
Both EU and U.S are currently using the ‘arm length governance’ model. Furthermore,
thinking about private versus public standardization bodies it is not easy to say which one of
them is in charge of organic food certification and labeling. “Therefore, the distinction between
private and government standards becomes blurred because certification by private organizations
58
Carsten Daugbjerg, (2012) The World Trade Organization and organic food trade: potential for restricting
protectionism?, Institute of Food and Resource Economics, University of Copenhagen.
59
Carsten Daugbjerg, (2012) The World Trade Organization and organic food trade: potential for restricting
protectionism?, Institute of Food and Resource Economics, University of Copenhagen.
30
with their own add-on standards implies compliance with both private and government
standards.”60
Another question which remains unanswered is the legal power of WTO agreements over
state or non-state actors. “While tariffs and quotas have been reduced significantly since the
creation of the WTO the rise in public and private standards is one element contributing to the
growing amount of non-tariff measures. So as to counter a trade impeding impact of non-tariff
measures, a number of agreements were developed.”61
When it comes to public bodies it seems logical that governments being members of
WTO are to stick to the international agreements such as The Technical Barriers to Trade
agreement (TBT). However, private bodies are separate entities in their nature and therefore, they
are not official members of WTO.
It is not only the main objective of TBT agreement to eliminate trade barriers but it is
also mentioned in the Council Regulation (EC) No 834/2007 that: “the functioning of the internal
market and control system, assessing in particular that the established practices do not leave to
unfair competition or barriers to the production and marketing of organic products”.62
Consequently, if there is a pure governmental governance over the organic sector their
practices should be in compliance with the TBT Agreement. It is much easier to define and solve
the relational question as the public bodies state the organic standards as well as grant certificate.
In this case rules are regulated on one level and there are no inconsistencies and sharp
differences.
In contrast to private organizations that have no obligations to comply with the WTO
rules, question remains whether the non-state actors that got delegated power by the government
are subject to TBT Agreement clauses or not. As Mbengue points out: “discussions on how to
deal with private standards, let alone how to ‘integrate’ these standards with the WTO framework
remain controversial.”63
There are various discussions going on about private versus public standardization
schemes. Some claim that private bodies acting behalf the state can misuse their status while
60
Henson S, Humphrey J (2009) The impacts of private food safety standards on the food chain and on public
standard-setting processes,(p.5), ALINORM 09/32/9D- Part II, Joint FAO/WHO Food Standards Programme, Codex
Alimentarius Commission, Rome.
61
Oliver von Hagen and Gabriela Alvarez, International Trade Centre (ITC),The Interplay of Public and Private
Standards. Geneva: ITC, 2011. x, 41 p. (Literature Review Series on the Impacts of Private Standards; Part III).
62
Council Regulation (EC) No 834/2007, article 41.
63
Mbengue, M.M. (2011) Private standards and WTO law’, Bridges, 5, 1, ICTSD.
31
serving their own interests. However, in countries as UK or Sweden private organic labels are
more dominant and influential on the national market.
There is also possibility that the stricter organic private standards can create barriers for
organic trade, and therefore eliminate imports of organic products. To illustrate, Soil Association
is one of ten private certifying bodies approved by the UK that was accused of unnecessary
import restrictions.
Soil Association was roundly criticized that the procedures of accreditation of Danish
organic livestock standards took too long and application was not progressing. Even though
Danish importers considered the accreditation procedure unnecessary Soil association provided
reasonable justification. Soil Association representatives pointed out that the global good image
of organic food was at stake and therefore, more complicated procedures are necessary for
imported products.64
To sum up, roles of private and public bodies in organic sector are interconnected. As
Hagen and Alvarez pointed out: “the interplay of private and public standards is a complex
question due to, first, the amount, the complexity, and specificity of standards developed by the
public domain and private entities and, second, due to the implications standards have on the
international trade system and participation therein.”65
64
Bacon: ‘Danish anger at organic blocks'.
Oliver von Hagen and Gabriela Alvarez, International Trade Centre (ITC),The Interplay of Public and Private
Standards. Geneva: ITC, 2011. x, 41 p. (Literature Review Series on the Impacts of Private Standards; Part III).
65
32
CHAPTER 7: Equivalency for Organic Trade
One of the general principles applied in organic trade is a principle of equivalence. Establishment
of the equivalence is a useful tool for the organic market growth. It means not only better market
access for producers and manufacturers but also consumer’s advantage of wider range of organic
products. Historical event happened when two largest markets of organic food, European Union
and United States acceded into the equivalency agreement in 2012.
“Agriculture Deputy Secretary Agriculture Deputy Secretary Kathleen Merrigan
announced that the United States and the European Union formed a partnership that will
recognize the two organic programs as equivalent and allow access to each other's markets on
Wednesday, Feb. 15, 2012 in Nuremberg, Germany. EU Commissioner of Agriculture and
Rural Development Dacian Cioloş and Merrigan signed the formal letters creating the
partnership”
66
The importance of this historical agreement and today’s equivalency system shall be
described in this chapter.
First of all, a definition of equivalency shall be provided. Equivalency itself can be
defined as: “a mutual recognition in the form of bilateral arrangements between key trading
partners that allows for successful trade by reducing trade barriers and supporting the
strengthening of the supply chain.”67
Needless to say, that equivalency does not mean identical mutually recognized standards.
Standards can have slight differences; however for the purpose of effective trade they must be
sufficiently similar.
Equivalency agreement is a bilateral agreement between trading partners that is based on
the principle of mutual recognition. Agreements that are based on the mutual recognition
principle facilitate promotion of global trade, by providing better and easier market access.
However, equivalency arrangements need long negotiations that are also costly.
66
United States Department of Agriculture (2012) USDA blog, ‘Organics take a major step forward with U.S- EU
partnership’, Posted by Agriculture Deputy Secretary Kathleen Merrigan, on February 22.
67
Organic Trade Association (2013)
33
Before negotiations, there have to be similar organic regulatory programs between the
potential trading partners. Countries with similar organic regulatory programs are entering into
equivalency agreements to facilitate trade of essentially similar organic products. At the time of
writing there are seven such arrangements – Canada/US, Canada/EU, US/EU, US/Japan,
US/Taiwan, Canada/Taiwan and Canada/Switzerland.68 Therefore, we can see that US have
concluded 5 bilateral agreements about organic equivalency trade already.
The European Union has much more organic trading partners than the United States.
According to Commission Regulation (EC) No 1235/2008 that is concerned with the
‘arrangements for imports of organic products from third countries’ eleven countries are having
open access to the European market. The oldest cooperating countries listed are Argentina,
Australia, Costa Rica, India, Israel, and New Zealand. These countries entered the list as third
countries’ after the approval granted by European Community. The next country listed in 2002
was not as a result of the approval but of the signing of bilateral agreement. “The European
Community and the Swiss Confederation have concluded an Agreement on trade in agricultural
product” which also included organic products.69
After the bilateral agreement with Switzerland in 2002, it took 6 more years to have new
members entering organic market in the European Union. It seems European governance ‘woke
up’ after issuing Regulation No 834/2007of 28 June 2007. Thus, another approved third countries
listed were Tunisia in 2008 and Japan in 2010.
There were two more and so far last bilateral agreements on organic trade concluded.
Equivalency agreements were signed between EU and Canada in 2011 and in 2012 agreement
between EU and US.70 As the last bilateral agreements were between the biggest organic markets,
it is inevitable to compare them.
Canada, USA and EU are the most important players when it comes to the equivalency
agreements of organic trade. They all have one thing in common. USA, EU, and Canada are
interconnected with the bilateral agreements about allowed organic trade in their territories. The
agreement between EU and Canada is considered more open than the agreement between US and
Canada. EU and Canada have simply open trading system of organic products and there is no
68
Guide to Organic Equivalency. Pro- Cert Organic, January 2013.
Commission Regulation(EC) No 1235/2008 of 8 December 2008 laying down detailed rules for the
implementation of Council Regulation (EC) No 834/2007 regarding the arrangements for imports of organic
products from third countries.
70
OACC, Organic Agricultural Centre of Canada, “Equivalency for Organic Trade”, November 2011.
69
34
need for additional certification. It is restricted, however, to imported or exported products that
must be processed and produced in the EU or Canada only. To illustrate, organic pineapple
grown in Peru and legally certified on organic Canadian market cannot be shipped to the EU and
other way around.
Equivalency agreement signed in 2009 between Canada and US will also provide with
possibility to sell organic products on their territories. The partners that have similar culture and
partially similar language will be now able to go forward and achieve organic market
expenditure. However, there is one additional requirement that must be fulfilled. Even though
their certification regimes are considered equivalent, additional certificate of equivalence shall be
provided. This certificate will verify that possible critical variances between the standards of US
and Canada are respected.
When comparing the agreements between EU/Canada and US / Canada there are slight
equivalency differences. As Organic Agriculture Center of Canada explained, “Canada/US
Agreement is different, because certifying bodies accredited by the Canada Organic Office can
provide certification to the terms of the Canada/US agreement outside of Canada to organic
products exported to US. So, the organic broccoli grown in Mexico that is certified organic to the
terms of the Canada/US Agreement could be exported as “organic” on the US market.71
All those agreements have one feature in common. The use of organic logo can be used
between EU, US, and Canada. Simply put, products exported from Canada to EU can use ‘EU
leaf’ logo and other way around. The same rule applies between Canada and US and EU and US
and vice versa. The latest agreement revealing equivalence of organic standards between EU and
US will be explained in following subchapter.
7.1 Organic equivalence arrangement between EU and U.S
After endless negotiations and long-lasting endeavor to have a cooperation agreement between
European Union and United States, ‘historical equivalency arrangement’ came true. Certainly,
this significant agreement provides easier access to the EU or US market with less costs for
double certification and cutting through the red tape. After a long decade it seems ridiculous that
71
OACC, Organic Agricultural Centre of Canada, “Equivalency for Organic Trade”, November 2011.
35
only two letters and one official meeting with representatives from the both sides of Atlantic was
finally ended up by the official signing of the agreement.
The official meeting was held in 15 February 2012 in at the BioFach event in Nuremberg,
Germany. European Commission released the same day that there were formal letters signed “by
Dacian Cioloş, European Commissioner for Agriculture and Rural Development; Kathleen
Merrigan, U.S. Agriculture Deputy Secretary; and Ambassador Isi Siddiqui, U.S. Trade
Representative Chief Agricultural Negotiator.”72
U.S representative Deputy Agriculture Secretary Merrigan expressed her enthusiasm
about the signed agreement by words: “It is a win for the American economy and President
Obama’s jobs strategy. This partnership will open new markets for American farmers and
ranchers, create more opportunities for
small businesses, and result in good jobs for Americans
who package, ship, and market organic products,”73
EU Commissioner Dacian Ciolos was upbeat on the decision as well when he said: “This
agreement comes with a double added value. On the one hand, organic farmers and food
producers will benefit from easier access, with less bureaucracy and less costs, to both the U.S.
and the EU markets, strengthening the competitiveness of this sector”74
This new partnership is so important also because; previously if there was a will to trade
with the organic products between European Union and United States, there were too many
additional requirements that could simply discourage the producers and companies. Double
burden to be certified on the other side of the Atlantic once again was too complicated, costly,
and irritating.
The agreement is limited to the country of origin principle just like organic equivalence
agreement between EU and Canada. Consequently, arrangement includes organic products that
have been processed, produced or packaged in the country of origin only. Furthermore, “products
processed or packaged in the U.S. or EU that contain organic ingredients from foreign sources
72
European Commission- Press Release: “European Union and United States agree to Historic New Partnership on
Organic Trade” http://europa.eu/rapid/press-release_IP-12-138_en.htm (Last accessed 15.5.2013)
73
Fresh Fruit Portal “US and EU sign historic organic food trade agreement”.
74
United States Department of Agriculture, Office of Communications, European Union and United States Agree to
Historic New Partnership on Organic Trade, News Release No. 0051.12, 2012
36
that have been legally imported as organic into the U.S. or into the EU are also covered by the
arrangement.”75
Moreover, there is one more sensitive topic for both parties considering organic products
traded under the agreement. The delicate issue is a use of antibiotics not only for livestock, but
also for fruit. Keith Ball shortly summarizes that current limitations are applied to livestock
produced in the EU which have been treated with antibiotics. Those livestock products, such as
meat or milk may not be exported to the United States. Conversely, the use of antibiotics for
control of fire blight in organic apple and pear orchards are currently permitted in the US,
whereas, it is prohibited for use on trees whose fruit is exported to the EU.76
Equivalency agreements mostly have in their scope some limitations or differences. As far
as, those little variances do not cause disruptions for both EU and US the goal of organic trade
liberalization can be still achieved. Needless to say, close dialogue about the changes of the
organic standards between EU and US can eliminate potential discrepancies and conflicts. Thus,
it was agreed that the representatives from both continents shall meet at least once a year and
inform each other about changed legislation about organic agricultural products
Therefore, equivalency partnership between United States and European Union opened up
new possibilities from June 2012. Even though, arrangement is pending so far only one year,
there were already plenty of producers waiting for this moment. Soon the organic producers and
farmers will possess the financial means to enter the transatlantic market and they will not have
to be afraid of double inspections and time-consuming bureaucratic procedures anymore. The
barriers of entry will fall and consequentially, the market will become much more attractive to
prospective suppliers.
75
76
Guide to Organic Equivalency. Pro- Cert Organic, January 2013.
Keith Ball, (2012) A summary of the different international standards and regulatory systems, IFOAM EU Group.
37
CHAPTER 8: Analysis of the Bilateral Equivalence Arrangement on Trade of
Organic Products between the EU and US - A Comparison of Organic
Standards
As explained in the previous chapter the last and the most important historical bilateral agreement
came into force in June 1 2012. After more than 10 years of effort Equivalency arrangement
between the biggest organic markets EU and US came true. The agreement, however have not
been effective for decades but at the time of writing, only for 12 months. Indeed, there should be
some variances and differences between the organic standards. This chapter will compare organic
standards of the EU and US and analyze whether they can be considered equivalent. This study is
divided into two sub-chapters focused firstly on detailed comparison of certification and
inspection standards and secondly on production standards. In addition, it worth mentioning what
lessons can be learned from each other and what could be possibly improved in future.
In order to understand current similarities and differences of organic standards, it is
necessary to think about historical aspect of organic agriculture in Europe and America.
Different cultures and attitudes towards food safety influenced the development of organic
standards in both the EU and US. One thing they have in common for a long time is the
importance of food safety assurance for their citizens. However, the citizen’s attitude, trust and
preferences of food products differ.
While many attitudes about food safety were based on tradition, some of challenges were
posed by modern food safety threats. Food production and technologies were quickly evolving
and genetic engineering and irradiation came into practice. The globalization of the food supply
brought new questions about the safety of traditional methods of processing products. These
challenges have been addressed by both the US and EU, but with slightly different regulatory
approaches and results.77
European culture has always been more traditional and closed to new technologies.
Classical European way of behavior towards agriculture is to favor more traditional and
acknowledged foods with as less processing as possible. This traditional approach and disbelief
to new technology, however, can possibly slow the agricultural development down. American
77
Marsha A. Echols (1998) Food safety regulation in the European Union and the United States: Different cultures,
different laws, Columbia Journal of European Law, HeinOnline, Vol. 4, pages 525-526.
38
culture, in contrast to European culture in general, have always been more enthusiastic about new
technological developments. Simply put, Americans have been more open-minded towards new
technologies that could be helpful for business growth and innovation. Interestingly, American
population was dubious of some traditional methods of processing instead.
Which approach can be considered as better one is not easily identifiable. On the one
hand the US was the one who came with the genetically modified organisms, that is considered as
a risky technology by a lot of Europeans. Therefore, when speaking about organic agriculture
where use of GMO’s is forbidden European skepticism was reasonable. On the other hand, new
technology and innovations, based on proper research and expertise can improve organic
production without being necessarily against organic principles.
Different cultures and history could be the potential reason for the differences between
their regulatory schemes. Hence, another important comparison of EU and US will be focused on
their regulatory schemes. M.A Echols maintained that the “US regulatory approach permits a
great deal of industry regulation, while the Europeans usually adopt a more detailed regulatory
scheme. In addition, the American approach focuses more on the product, while that of the EU
focuses more on the production process.”78
Due to detailed descriptions of both regulatory regimes of organic agricultural products in
this paper, some analysis can be done. First of all, as mentioned above European legislation have
always been more detailed, however it appears to be less transparent and understandable for
common citizens. As an example, European organic Regulation does not even define two
important words: ‘inspection’ and ‘certification’, while the National Organic Program of the US
has that terminology clearly defined.
In EU organic product’s focus is shifted more on the production practices, while there is
no indication in any legal act how is the final product measured. In contrast, the US has detailed
legislation concerning calculation of the percentage of the ingredients used, to approve if the
product is really organic. The duty to prove the percentage of the organic ingredients used is up
to handler who puts the organic label on the product. This percentage must be verified by the
certifying agent of the handler. The legislation is written so clearly that even the handler himself
can calculate the percentage. To illustrate, this is how 100% organic foods shall be calculated:
78
Marsha A. Echols (1998) Food safety regulation in the European Union and the United States: Different cultures,
different laws, Columbia Journal of European Law, HeinOnline, Vol. 4, pages 525-526.
39
“Dividing the total net weight (excluding water and salt) of combined organic ingredients at
formulation by the total weight (excluding water and salt) of the finished product.79
After digging through organic legal instruments issued in the EU and US sources a lot of
differences can be detected. Relevant comparisons about organic agricultural history and
regulatory schemes were provided. Moreover, this chapter needs to be divided into two following
subchapters concerning detailed comparisons of certification and inspection practices as well as
production and livestock standards.
8.1 Comparison of certification and inspection systems in the EU and US
According to above provided, separate, and detailed chapters about organic certification
procedures in the EU and US it is now possible to compare them and draw conclusions. This
subchapter will focus on differences between duties performed by the certification and inspection
bodies.
The certification schemes are in general based on the same principle, with the accredited
body that issues the certificate to the organic producer that complies with organic rules.
Certification bodies, whether it is in the EU or in the US, can be both public and private.
While in the EU certification is handled on the national level, in the US it is handled by
state or private agencies that must be approved by US Department of Agriculture. EU Member
States must report and show adherence to the responsibilities stated in organic Regulation to the
EU Commission on annual basis.
Therefore, EU Member States do not need to be approved by any European Committee
but every state is solely responsible for the conduct of proper inspection or certification practices.
Furthermore, there is a strong emphasis put on central competent authorities that shall be in close
cooperation with the inspection bodies. Consequently supervision in the EU is mostly held on the
national level, while it seems that in the US, Department of Agriculture has much more
supervising power.
Moreover, for both parties applies the rule that the certification bodies or agents have to
be accredited. Accreditation in European Union is based on international or European standards
79
National Organic Program (NOP), Title 7 Agriculture, Subpart D—Labels, Labeling, and Market Information,
§ 205.302 “Calculating the percentage of organically produced ingredients”.
40
such as ISO 65/EN 45011.80 American certification bodies should be accredited by the USDA
only.81 Therefore, European legislation does not provide more guidance for accreditation, as it is
handled on the international level by compliance to ISO 65 or EN 45011. USA in contrast have
very wide legislation stating various criteria for accreditation. Thus, in this point USA and
National Organic Program appears as more independent self-regulating actor, where the
accreditation rules are not based on international organic standards.
When it comes to the inspections of the organic producers, both European and American
organic rules state that inspections must be held at least once a year. However, there is a big
difference concerning definition of duties of the inspectors or control bodies responsible for the
organic certification. In the European legislation control body must fulfill a few requirements in
order to perform the controls. In contrast to EU organic inspection rules, National Organic
Program in the US harmonizes criteria and responsibilities for the entity that is accredited as a
certifying agent.
To illustrate the difference, there are just three subparagraphs in the EU organic
Regulation stating that the control body must prove “the expertise, equipment and infrastructure
required to carry out the tasks delegated, sufficient number of suitable qualified and experienced
staff, and that the control body is impartial and free from any conflict of interest as regards the
exercise of the tasks.”82 No further details are provided neither about the tasks of the controlling
body nor about any conflict of interests in the EU level.
US National Organic Program provides that a private or governmental entity accredited
as a certifying agent must not only have the expertise and ability to provide certification services,
but also provide sufficient information to persons seeking certification. There is an annual
performance evaluation of all persons who review applications for certification as well as annual
program review of the certification activities conducted by the certifying agent’s staff. Strict
confidentiality must be maintained with respect to their clients, and any business-related
information shall not be disclosed to third parties.83
80
Commission Regulation (EC) 834/2007 of 28 June 2007 on organic production and labeling of organic products
and repealing Regulation (EEC) No 2092/91, Official Journal of the European Union, L 189/1, Title V, Article 9,11.
81
National Organic Program(NOP), Title 7 Agriculture, Subpart F- Accreditation of Certifying Agents § 205.506.
82
Commission Regulation (EC) 834/2007 of 28 June 2007 on organic production and labeling of organic products
and repealing Regulation (EEC) No 2092/91, Official Journal of the European Union, L 189/1, Title V, Article 27
(5)(b)(i-iii).
83
National Organic Program(NOP), Title 7 Agriculture, Subpart F- Accreditation of Certifying Agents § 205.501(110).
41
In line with the EU organic Regulation, there are not much responsibilities put on the
control bodies plus there are not granted any confidentiality rights to the organic producers or
handlers either. In addition, it seems that EU legislation does not sufficiently prevent the conflicts
of interests as nothing is mentioned in the organic Regulation about objectivity of the controls
body’s activities or simply discrimination clause.
Following this, there is in contrast to the EU quite strong emphasis put on prevention of
the conflicts of interest in the US organic legislation. To illustrate, conflicts of interest stated by
NOP can be prevented by: “not permitting any employee, inspector, contractor, or other
personnel to accept payment, gifts, or favors of any kind, other than prescribed fees, from any
business inspected” or by “ensuring that the decision to certify an operation is made by a person
different from those who conducted the review of documents and on-site inspection.”
In
addition, the discrimination clause provides that: “No private or governmental entity accredited
as a certifying agent under this subpart shall exclude from participation in or deny the benefits of
the NOP to any person due to discrimination because of race, color, national origin, gender,
religion, age, disability, political beliefs, sexual orientation, or marital or family status.”84
Besides, little differences in the certification schemes in the EU and US, one more point
worth mentioning. America as a continent is much bigger than Europe and I am comparing their
organic standards only. However, it is interesting to see that continent that involves 50 states has
only about 100 certifying agents, whereas European Union that is comprised out of 27 Member
States has approximately twice as much. American bodies are more connected with the
government while European certification bodies are more often private, however, latter are still
controlled by the Member States official authorities. It can, as agricultural-economic researcher
from the University of Saskatchewan J.L. Hobbs suggests, be due to the fact that “consumers in
the US tend to trust the government, while recent food safety scares have led EU consumers to
become more risk averse on issues of food safety and more distrustful of the government.”85
84
National Organic Program(NOP), Title 7 Agriculture, Subpart F- Accreditation of Certifying Agents
§ 205.501(11-21)
85
Hobbs J.E, (2006) Consumer decision making under risk and uncertainty”, In Phyllips P.W.B., Smyth S., Kerr,
W.A., (Eds.), Governing Risk in the 21st Century, Nova Science Publishers, New York, pp. 73-82.
42
8.2 Comparison of production standards with focus on livestock issue
After comparing certification and inspection procedures in the EU and US, it is also needed to see
if there are also other differences concerning organic production. There are significant
differences between production standards such as; use of antibiotics for animals and crops,
livestock living standards, and condition for separation of organic production from conventional.
US allow growing organic and non-organic crops on the same production unit, while the
EU does not. European general farm production rules provide that: “the operator shall keep the
land, animals, and products used for, or produced by, the organic units separate from those used
for, or produced by, the non-organic units and keep adequate records to show the separation.”86
Consequently, in this regard lack of legislation about proper separation of organic production
from conventional production in the US can lead to mistrust of exported products from the US for
European consumers.
Turning now to the sensitive question of organic livestock production it is crucial to
analyze and show current differences between EU and US standards. Provided that livestock
welfare and healthcare are the most important aspects of the topic, serious criticism can arise if
the organic standards are not equal. Generally speaking, organic livestock should have peaceful
life with avoidance of stress or land limitations and should not be treated with any antibiotics or
fed by chemical feed.
Firstly, livestock production rules in the EU provide that: “the livestock shall have
permanent access to open air areas, preferably pasture, whenever weather conditions and the state
of the ground allow this, the number of livestock shall be limited to minimize overgrazing, and
transport of livestock shall be limited to the shortest time as possible. Any suffering including
mutilation shall be kept to a minimum during the entire life of the animal, and what is absolutely
prohibited is tethering or isolation of livestock”.87
EU Regulation 834/2007 (EC), Article 14(2) (f) (ii) states with regard to veterinary
treatment: “(ii) disease shall be treated immediately to avoid suffering to the animal; chemically
synthesized allopathic veterinary medicinal products including antibiotics may be used where
86
Council Regulation (EC) 834/2007 of 28 June 2007 on organic production and labeling of organic products and
repealing Regulation (EEC) No 2092/91, Official Journal of the European Union, L 189/1, Title III, Article 11., L
189/1
87
Council Regulation (EC) 834/2007 of 28 June 2007 on organic production and labeling of organic products and
repealing Regulation (EEC) No 2092/91, Official Journal of the European Union, L 189/1, Article 14 “Livestock
production rules”. L 189/1
43
necessary and under strict conditions, when the use of phototherapeutic, homeopathic and other
products is inappropriate. In particular restrictions with respect to courses of treatment and
withdrawal periods shall be defined.”88
Secondly, US legislation seems to be less detailed about livestock production and living
conditions. The National Organic Program provides that antibiotics use for sick animals is
prohibited and in case of using it the organic status of the animal cannot be preserved anymore,
and must be clearly identified and not sold as organic. Another relevant thing is livestock living
conditions in the US. Producers must give livestock access to the outdoors and establish clean dry
living conditions that accommodate the animal’s health and natural behavior.89
Bearing in mind the previous points about livestock production in the EU and the US, it is
possible to analyze them and see the crucial differences. The EU in contrast to the US is allowed
to use antibiotics for sick animals when it is necessary and there is no indication in the legislation
as to whether the livestock products can still be sold as organic in this case. The US thus secured
this aspect in order to avoid any potential conflicts or inconsistencies by the exclusion clause
provided in the signed equivalency arrangement between the EU and US. Consequently under the
equivalency arrangement signed in 2012, agricultural products derived from animals treated with
antibiotics in the EU must not be shipped to the US.
Thirdly, with regard to livestock welfare, it is worth noting that US standards for animals
are not really equivalent, and there is no exclusion clause under the equivalency agreement that
would prevent European consumers from eating organic meat shipped from the US. Simply put,
if the organic meat imported from the US is on the shelves of the European supermarket with the
same organic label, it seems unfair that the EU with its stringent standards for animal’s welfare
had to put much more effort and expenses into the livestock living conditions, while the US did
not.
Philip Lymbery, chief executive of the UK’s Compassion in World Farming, the animal
welfare charity organization, was strongly criticizing organic animal welfare standards and the
EU-USA equivalency agreement. In his opinion EU provides much better living conditions for
livestock than US.
88
Council Regulation (EC) 834/2007 of 28 June 2007 on organic production and labeling of organic products and
repealing Regulation (EEC) No 2092/91, Official Journal of the European Union, L 189/1, Article 14(2)(f)(ii).
89
Agricultural Marketing Service-(USDA) (2012) Brian Baker, Organic Materials Review Institute, Jim Riddle,
University of Minnesota, “National Organic Program Summary”.
44
The current situation can be illustrated also by a negative view of Philip Lymbery after his
return from the USA in 2012: “Whilst in the US, I was deeply concerned to learn about a recent
announcement stating that the world’s two largest organic markets – the EU and the US – had
entered into an ‘equivalency’ agreement,” he said. “This means that organic farm animal welfare
products from the U.S. can be sold as ‘equivalent’ to EU farm animal welfare products, and vice
versa.”90
In Lymbery’s opinion the main problem is that US organic standards fall well below those
in the EU and therefore, the standards are simply not equivalent. He is providing several
examples showing that some of the practices that are forbidden in the EU are allowed in the US.
To illustrate, electric goads are banned outright in EU organic standards, while not in the US.
Another example provided by Mr. Lymbery can be unfortunately quite influential: “That’s a far
cry from what the EU consumer expects from an organic label. Ducks on U.S. organic farms
don’t have to be given access to a pool or lake to swim in. The list goes on.”91
Assuming that this is the case, equivalency agreement can actually destroy the good
reputation of organic products across the Atlantic board. The fact that US animal products are
considered equivalent, while they are not can undermine the trust of consumers that are especially
concerned about animal welfare. Therefore, it seems inevitable to revise these standards in near
future or just simply exclude American organic meat from European market.
Finally, there is one more issue concerning antibiotics. However, this time it does not
concern livestock but crops instead. Given that organic producers in the US are allowed to spray
apple and pear trees with antibiotics called tetracycline and streptomycin, whereas EU organic
farmers are not, these apples and pears are not included in equivalency arrangement.
Accordingly, organic crops that were treated with antibiotics may not be exported to the
European Union under the ‘historical agreement’ between the EU and US.
Some of the differences between standards can be simply solved by counterbalancing
allowance versus prohibition and vice versa. For instance, provision for use of an amino acid feed
additive (methionine) for poultry in the US resulted in extended discussions with the EU which
does not allow this additive. However, it was eventually reconciled, being counterbalanced by the
more generous allowance of conventional feed for non-herbivores in the EU Regulation.
90
91
O.W.N. News Organic Network, The international Newspaper for Organic trade, June 2012.
O.W.N. News Organic Network, The international Newspaper for Organic trade, June 2012.
45
Consequently, there was a willingness to focus on the big, goal-oriented picture of the bilateral
equivalency agreement and avoid long discussions on small differences.92
It is clear from this chapter, that there are several differences between organic standards.
Brief overview of the history of organic agriculture in both continents illustrated that there have
been inherent differences already back then. Afterwards, regulatory approach was discussed and
information provided suggests that European legislation is not transparent and clear enough,
while US legislation is. By comparing the certification, inspection and production standards I
conclude that they are very similar, but that there is still room for improvement with regards to
equivalence.
The most crucial point so far was concluded by project Global Organic Market Access
(GOMA) when summarizing that open discussions can lead to harmonization and continuous
improvement. GOMA suggests that open and honest dialogue can create and orientation towards
learning from each other, wherein the both EU and US can recognize opportunities to improve
their standards and control systems.93
92
United Nations Conference on Trade and Development (UNCTAD) , Food and Agriculture Organization of the
United Nations(FAO) and International Federation of Organic Agriculture Movements(IFOAM), Project GOMA:
Global Organic Market Access (2013) “Bilateral Equivalence Arrangements on Trade of Organic Products: a review
of processes leading to arrangements between Canada and United States, Canada and European Union and European
Union and United States”.
93
United Nations Conference on Trade and Development (UNCTAD) , Food and Agriculture Organization of the
United Nations(FAO) and International Federation of Organic Agriculture Movements(IFOAM), Project GOMA:
Global Organic Market Access (2013) “Bilateral Equivalence Arrangements on Trade of Organic Products: a review
of processes leading to arrangements between Canada and United States, Canada and European Union and European
Union and United States”.
46
CONCLUSION
The present study was designed to determine the difference between organic standards in
European Union and United States and evaluate their equivalency. Significance about the topic
‘Equivalence of organic standards between EU and US’ is its recently concluded Equivalency
arrangement.
While this historical arrangement opens the door for transatlantic organic trade, there are
serious issues of equivalency that can lead to potential mistrust to organic standards at all. Thus,
the work contributes to existing knowledge about organic food standards by providing current
detailed comparisons of the biggest organic producers and by finding out critical differences that
are neither excluded from the agreement nor planned to be amended. In this investigation, the aim
was to assess the critical variances between organic standards from the legal point of view.
Organic labeling, certification and inspection standards were examined to help to
understand the reader how are the EU and US organic rules designed and applied in practice.
After the detailed overview of the both organic legal frameworks, conclusions can be drawn and
the central research question can be answered. In addition, it is worth mentioning what lessons
can be learned from each other and what could be possibly improved in future.
Returning to the question posed at the beginning of this study, whether the organic
standards between the EU and US are equivalent and to what extent, is now possible to answer.
The most significant finding to come from this study is that though organic standards are equal at
first glance, after digging into the both EU and US organic legislation many differences emerged.
Whilst this study did not have enough room to indicate all of them, the most important
divergences are mentioned and analyzed.
The evidence from this study suggests that different cultures and history of the trading
parties is the potential reason for the detected differences between the organic regulatory schemes
and their attitudes towards organic agriculture in general.
Labeling chapters indicated that, while the European organic logo has to be used on
mandatory basis as from 2010, the United States organic logo is simply used on a voluntary basis.
In addition, the new organic label in the EU serves for the mutually recognized standards
between Member States, whereas the US organic label represents just added value for the organic
product. In general, therefore, it seems that the US does not need any transparency tools such as
47
mandatory organic labeling in order to have proper flow of organic products between all 50
states.
The second major finding was that EU still has much to learn from the US when it comes
to the organic certification. Firstly, terminology such as ‘certification’ and ‘inspection’ needs to
be harmonized and defined in the organic regulation, to provide more transparency on the EU
level. While in the EU certification is handled on the national level, US certification is handled
per state or by private agencies that must be approved by the US Department of Agriculture.
There are also approximately 50% less certifying bodies in the US than in the EU.
I suggest that there should not be more controlling bodies established by the Member
States themselves, however a special common European license should be granted to the existing
bodies. What is now needed is the establishment of a separate EU agency to issue the approvals
for the controlling bodies in the Member States and provide them supervision in the new
equivalency system. Instead of reporting the European Commission once a year, the closer
dialogue on regular basis between the newly established agencies, representatives of the Member
states, and the Commission could be a good improvement for the whole European organic food
regime. An implication of these suggestions is that certification system would be harmonized on
the EU binding level, while providing the assurance of the equivalent certification schemes and
transparency.
The present study provides additional evidence with respect to the inspection practices
and roles of the certification bodies. Taken together, my findings suggest that certification bodies
in the US have much more duties and responsibilities than the EU certification bodies. By
granting strengthen role and more responsibilities to the control bodies on the EU landscape, all
system of the certification of organic food could face significant future improvement.
Further findings suggest several courses of action for the United States. In this case EU is
serving for an example. Question of separated organic agricultural units from the conventional
units is still open. European organic Regulation states explicitly that the units shall be separated,
whereas US does not. Another issue addressed was livestock standards that seem to be lacking
equivalence at all. While the EU grants much better living conditions for the animals, US provide
just the ‘basic package’ for the animal welfare. Thus, in case of raised awareness about unequal
animal welfare standards among European consumers, serious consequences could be the
absolute exclusion of organic meat imports from the US. Therefore, there is a definite need for
48
the future debate about moving forward the proper and equal harmonization of the organic
livestock standards.
Whereas many international organic bodies are very enthusiastic about equivalency
agreements, and their extensions to more developed or developing countries, in my perspective it
could undermine the organic integrity completely. The findings about the critical differences that
need to be improved by the EU and US trading partners, are serving for an example that equal
standards from the first sight are not actually equal at all. There is still room for further
improvements for the existing equivalency agreements about organic food instead.
A method of counterbalancing the differences between the organic legislation with the
aim of the agreement conclusion is just a short-term solution for the organic trade. In other
words, closing one’s eyes to not to see the organic standard’s differences or to avoid further
amendments of legislation can lead to mistrust of organically labeled products by consumers on
both sides of the Atlantic.
Some of the academics put forward the idea that one set of common international binding
standards is the solution for more transparent and efficient organic trade around the world. In my
opinion, however, it is just a dream that probably will never come true. One major drawback is
that there are no international bodies that would have sufficient power to enforce the common
organic rules. Therefore, an implication of one set of common rules is the possibility that binding
organic standards on the international level would create less transparency, confusion among
consumers, and decrease of worldwide organic market demand eventually.
A reasonable approach to tackle the present equivalency issue could be to schedule a
meeting between the trading partners more than on an annual basis, in order to revise and
improve their organic legal frameworks with the aim of the eliminating the critical variances
between the organic standards.
To conclude my master thesis, I came up with the simple idea that the less is more. Less quality
bilateral agreements, without overseen issues and critical differences can provide better and faster
future development of the organic trade.
Thus, my suggestion is that instead of expanding organic equivalency agreements, or
having common organic international standards, the door of the organic market for the new actors
shall be simply closed until the existing agreements are sufficiently revised and improved.
49
ANNEX
50
51
52
53
54
55
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60
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61
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62